Apple Inc (AAPL)

It reported last week blow-out iPhone sales and great numbers from China. They guided strong gross margins this quarter. After being flat, shares have risen 8.45% since. It helps that they're not spending a ton on building data centres simply by partnering with Google Gemini.

it just reported a terrific quarter. It won't be brought down by the price of memory or anything. It's stronger than that. Revenues were up 16% and for the first time reported great sales in China, up 38%. 

We still haven't seen an AI plan, and so she's pretty negative on the stock. As we go further into the cycle and the data centre drives prices for things like memory, component costs for AAPL will start to increase significantly. That's a risk. Pretty high growth margins means it would still be profitable.

Expectations are very low, so earnings could surprise to the upside. But to get excited long term, need to see progress on positioning in AI.

It reports Thursday. Is -2.8% over the last 3 months, partly because of the soaring cost of memory chips. What gross margins can they generate? How strong are iPhone sales? What is their AI strategy?

AAPL has been on a solid uptrend since the summer of 2025, and it rose into early December while most large-cap tech names were flat into that month. There was some profit-taking in December on names that had a strong 2025, and AAPL was likely one of those names. Some analysts cited valuation concerns early this year, and that created some headwinds for the name, and there was some general rotation to start the year as small-caps outperformed mega-cap tech stocks. Its earnings are later this week, and we think that any news on its AI strategy, China smartphone demand, or growth in its services segment can be potential catalysts for the name. We like the name over a long-term horizon, but it has evolved into more of a defensive name, versus a large-cap tech growth stock.
Unlock Premium - Try 5i Free

It reports Thursday. The stock is down the last 8 weeks. Apple needs memory storage, but prices are now high, so they have to pay up for it. He still thinks: own Apple, don't trade it. But if Apple guides lower, the share decline isn't over.

Starting to see some profit-taking, at least that's what it looks like so far. What to watch for technically is $250, a nice round number and the previous peak. If it starts taking out $250, and falling below $245, that's a sign of deeper trouble. Right now, still looks to be in a correction.

For new $$, wait to make sure it doesn't keep trending down. There's always a battle between picking up a bargain and catching a falling knife.

He's betting it will underperform in 2026, and wishes he owned no shares. It trades at 33x forward PE and projected to grow 8% EPS in coming year. Maybe 12% if they get AI right. Not impressed.

Their playbook is to sit and watch a new product in the market, then see if they can perfect it without spending too much capex. This is what is happening with AI. Apple, Alphabet and more recently Amazon have momentum among the Mag 7. He expects a strong 2026 for Apple when they reveal their AI plans.

Buys back a lot of shares, reducing shares by 33% since end-2015. Over 10 years, shares are up nearly 90%. Own this and don't trade it.

It is finally showing some growth and is doing better in China. It is fully valued at over 30X earnings. The new phone is very thin and there is talk that they're going to come up with a foldable version. Samsung has that too. Single digit growth. Wait for a pullback.

They have a good core business in phone. The PE is a little high, but the company isn't going away anytime soon.

Apple is poised for a pullback. The recent executive departures won't move the name. Apple remains in pole position in consumer products. Apple execs leaving for other companies to build AI-related hardware is risky that will see only a 5% chance of success. As long as Tim Cook stays, earnings will be good and the stock will continue to move higher.